The Estonian government decided to sell its rail freight company Operail and turn it into a private operator due to financial difficulties. It now seems that there is a leading candidate to become Operail’s new owner, a negotiations officially started with Tiigi Keskus, a real estate company who also owns Tartu Mill, a company producing wheat and rye.
The Estonian Minister of Infrastructure pointed out that many parties came forward showing interest in purchasing Operail from the state. Tiigi Keskus’ offer was deemed the best one, and now negotiations can start. Should negotiations fail, other potential buyers who already submitted an offer will have the chance to be reconsidered. The amount offered by Tiigi Keskus to take over Operail has not yet been disclosed.
Tiigi Keskus pointed out that taking over Operail might also enhance synergies with Tartu Mill’s portfolio. Tartu Mill owns Estonia’s largest grain mill and has a presence in Latvia as well, which could be fertile ground for Operail’s new life. “We plan to continue to provide high quality freight and rolling stock repair services in Estonia and also to expand geographically,” a board member from Tiigi Keskus told Estonian media.
The sale of Operail
The Estonian government decided to put Operail for sale last February, with the procedure starting four months later. The main reason behind this choice is that western sanctions on Russia and Belarus took too big of a toll on the company’s profitability. Moreover, representatives of the government highlighted the lack of a need to have a state-owned rail freight operator in a landscape where private players are already doing a good job. Currently, Operail employs around 200 people.